Apprenticeship Funding from 1st May 2017 including the new Apprenticeship Levy – Update November 2016
All Employers will be funded under the new funding regime for their apprentices commencing from 1st May 2017. Any apprentices who commenced prior to this date will continue to be funded through the current system. Apprentices cannot leave the current system and re-start on the new funding system after 1st May unless there are extenuating circumstances.
For Levy-paying Employers, i.e. those with a payroll over £3M, funds will appear in their DAS account from end of May onwards. The first Levy tax will be payable to HMRC from April and Government will top up the funds by 10% each month. Funds in the DAS will expire after 24 months unless spent on apprenticeships and this expiration will be on a first-in, first-out basis.
There are 15 funding bands set by Government, depending on the occupational sector. It doesn’t matter whether the apprentice is undertaking a Frameworks apprenticeship or a new Standard apprenticeship, the funding will be capped in one of these 15 bands. The employer will negotiate a price for their apprentice, depending on the amount of training needed, e.g. a school leaver with no prior experience may be charged at maximum amount whereas a 28-year old with previous experience and knowledge may only need some of the training and will be negotiated at two-thirds of the cap. This will be agreed between the employer and the training provider and a commitment statement and contract will be raised to cover the agreement. Once this is in place and the apprentice commences, funds from the DAS can be paid to the Training Provider.
Non-levy paying employers will be partially funded for their apprentices. They will need to pay 10% to the training provider and the training provider will be able to claim 90% of the funding from the Government. This system will also commence in May 2017 but non-levy paying employers will not be required to use the DAS until 2018. The Government plans to have all apprenticeships paid from the DAS by 2020, using the above system of negotiation and contracts per apprentice/employer.
In the meantime, apprentices with non-levy paying employers will be funded by the Government direct to the Training Provider and the Employer’s 10% cash contribution will also be paid to the Training Provider. So for ITEC employers and apprentices, it will be business as usual.
Extra Support and Incentive payments
The Government has promised payments to help meet the additional costs associated with training young apprentices so all employers will receive an incentive payment when they employ a 16-18 year old apprentice, or a 19-24 year old with an Education and Healthcare Plan provided by local authority or has been in the care of the local authority. There will be an incentive payment of £1000 available for the employer for training an apprentice in this category. Training Providers will also get £1000 towards the cost of training these young employees.
Funding will be available for English and Maths training where the apprentice does not have the required minimum standard and needs to undertake an English and/or Maths course. These payments will be made to the training provider.
The funding for Framework apprenticeships has been significantly reduced to encourage the growth of new Standards apprenticeships. During the transition period, Government has agreed to increase the framework funding by 20% for 16-18 year old apprentices or 19-24 year olds with an Education and Healthcare Plan provided by local authority or has been in the care of the local authority. There will also be some disadvantage uplift funding available to support apprentices from areas of deprivation.
How can we help?
ITEC has been running training programmes for young people and local employers since 1984 and has trained 1000’s of young people from the Basildon district. Many of our past learners have gone on to achieve fantastic careers and some are employing and training today’s apprentices! Whether you are a levy-paying employer or a non-levy paying employer, we have apprenticeship programme options to suit your needs. Specialising in ICT, Digital Administration (administrative roles with computer use) and Social Media, we can offer BCS, Microsoft and CompTIA professional qualifications as part of the programme. We are here to help and can assist you with getting the best out of the new apprenticeship funding system to meet your business objectives.
For further details contact our:
Youth Programmes Co-ordinator, Toni Marshall, 01268 286929 Toni@iteclt.co.uk, or
Business Development Manager, Kirk Redhead, 01268 286929 Kirk@iteclt.co.uk
Training tomorrow’s workforce today is our speciality!